Inflation, debt surge, and AI buildout cited as yield drivers
The average rate on a 30-year fixed mortgage rose to 7.28% from 7.03% the prior week, according to Freddie Mac, The Wall Street Journal reported in its daily What’s News newsletter. The 25-basis-point weekly increase is the latest move in a bond market selloff.
The newsletter identified three forces pushing bond yields higher: persistent inflation, a surge in government debt, and heavy corporate borrowing for the build-out of AI infrastructure.
The Wall Street Journal said bond yields and bond prices move in opposite directions, and that the selloff is raising borrowing costs for home buyers.
The newspaper wrote that the selloff is “dealing blow after blow to a limping housing market.” The newsletter did not include specific home-sales or inventory figures.
Mortgage rates, which are priced off Treasury yields, follow the bond market’s direction.